At Realmark, we have managed property through multiple market cycles. What we are seeing now is a market where strong headline rents in residential property can disguise increasing costs, changing regulation and greater competition for tenants. REIWA data is also showing a divergence in growth between rental growth for units and apartments and standalone homes.*
For strata investors in particular, understanding the performance of the property means understanding what is happening around it before it hits the headline.
Some of the trends we are discussing with our owners include:
- Rising strata costs. Insurance, maintenance, compliance and strata contributions can increasingly impact the net return, even where rents have risen.
- Ageing buildings. Some established schemes are entering a more maintenance-intensive stage. Ten-year maintenance plans can provide valuable insight into upcoming works, reserve funding and the potential for future levies.
- More discerning tenants. New apartment developments are adding contemporary amenities and well-maintained shared spaces to the market. Established properties need to remain appealing and competitive.
- Changing rental regulation. WA reforms covering rent increases, pets and minor modifications have changed aspects of managing a tenancy, while further government and taxation settings can influence investment decisions.
- The need to know the real return. Strong rent can still be eroded by repeated repairs, vacancy, tenant turnover and increasing strata costs.
For Realmark, proactive property management means helping owners understand this bigger picture.
Our advice is not to wait for a special levy, major repair or market shift to review your investment.
Realmark Urban offers a complimentary property performance review to help owners navigate the market and position their investment for what comes next.
Source: REIWA Market Snapshots
This article was originally published on The WA Strata Magazine, October Edition.